Silver lining: Sa Sa Malaysia has recovered to 77.4% of pre-pandemic levels as COVID restrictions ease
The beauty retailer recorded that second quarter (Q2) sales grew 248% year on year (YoY). The high number is partially due to the low base comparison.
Compared to the 2018/19 figures from the same period, sales dipped by 22.6% to HKD70.8m (USD9m). However, Sa Sa has noted improvements, adding that these latest sales figures showed a recovery to 77.4% of pre-pandemic levels.
The company credited the long-awaited recovery to Malaysia’s acceptance of the COVID-19 as an endemic. “Following the Malaysian government’s change in strategy for fighting the pandemic, our business has continued to rebound strongly.”
The improvements it has seen in Malaysia were a silver lining in its Q2 results. Between July to September 2022, the group’s total turnover fell by 1.1% YoY to HKD750.1m (USD95.5m). Compared to the same period in the pre-pandemic 2018/19 financial year, it declined by 62.1%.
Sa sa’s business was negatively affected by the decline in China Hong Kong and Macau.
China’s turnover declined by 9.8% YoY to HKD59.2m (USD7.5m) and 10.8% compared to pre-pandemic levels.
This was mainly due to the pandemic outbreak and weak consumer consumption, this also resulted in a 11% decline in same store sales. As part of measures to enhance profitability, the company shuttered 29 loss-making stores during the quarter.
Store optimisation in China will continue to be a priority for Sa Sa moving forward. The company said it would “strictly control overall costs to minimise losses”.
The company emphasised the importance of the Chinese market and that it would retain “resources to support sustainable development of its business” in China for the long-term.
In Hong Kong and Macau, the company so a decline of 8.5% in the quarter to HKD478m (USD60.8). Compared to 2018/19, the decline was a whopping 72.3%.
“Our business was severely hit by the COVID-19 pandemic after a sharp spike in infection cases since late June 2022. Macau SAR faced its first citywide COVID-19 lockdown in July 2022, which also led to a significant decline in tourist visitors,” the company explained.
While retail and wholesale turnover declined in Hong Kong and Macau, same-store sales increased by 6.7% despite a decrease 11 stores.
“This increase was driven by local consumption and promotional campaigns capitalising on the Hong Kong SAR Government’s Consumption Voucher Scheme to attract consumers,” said chairman and CEO Simon Kwok.
Additionally, online sales in Hong Kong increased over 70% year on year, driven by the Sa Sa online store.
However, it was not able to offset the impact of the pandemic outbreak in China, which caused online sales in the second quarter to decrease by 1.7%, said the firm.
“The lockdowns had a significant impact on cross-border logistics and restocking at the Group’s e-commerce warehouses on the Mainland. The slowdown in cross-border logistics also delayed the end-to-end delivery of goods from the Hong Kong SAR to our Mainland customers.”
Compared to 2018/19, the online business increased by 65.2%.